Relief for Sri Lanka; IMF agrees to lend $2.9mn to debt-ridden island amid economic crisis
The IMF agreed to provide debt-ridden Sri Lanka with $2.9 billion over four years to help salvage the country from its worst economic crisis.
The International Monetary Fund (IMF), on Thursday, agreed to provide debt-ridden Sri Lanka with $2.9 billion over four years to help salvage the country from its worst economic crisis. In a statement released by the IMF team which had visited the island nation, it said the arrangement will work to restore financial and macroeconomic stability and debt sustainability as well as unlock the country’s growth potential.
“Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps,” the statement said.
Earlier on Tuesday, Sri Lankan president, Ranil Wickremesinghe, said talks with the IMF successfully reached the final stages.
PM Ranil accuses the former government of the current situation
Earlier, the Sri Lankan President blamed the previous government for the food crisis in the country. According to him, the Mahinda Rajapaksa-led government had abruptly implemented a 100% organic agriculture model by banning chemical fertilisers. He said this resulted in the collapse of the agriculture sector.
Moreover, he claimed that foreign exchange shortages caused by a fall in tourism during the COVID-19 pandemic were also a major reason for the current situation. However, this time, securing fertiliser and compiling a food security program were being given equal priority, he maintained.
More on the Sri Lanka crisis
The island nation has been experiencing its worst economic crisis in history. The country has huge debt obligations and dwindling foreign reserves, and has been struggling to pay for imports, causing a shortage of essentials. Citizens were forced to stand in long queues for fuel, cooking gas, and medicines. Earlier in May, the World Bank said it will disburse nearly $700 million to the island nation in the next few months.
The major development came after the World Bank’s Country Manager in Colombo, Chiyo Kanda held discussions with the Sri Lankan Minister of Foreign Affairs GL Peiris on the current situation of the country last week. During the most awaited meeting, Kanda assured him that the agency will work with the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and the UN office to re-purpose their already committed projects.